Managing your student loan debt

Kim Murphy

What options are available to manage your student loan debt? What terms are available for repayment? This article addresses some options.

Direct Subsidized and Unsubsidized Loans have a six-month grace period after you stop attending — drop to less than half time, graduate, or withdraw — before the first payment is required. Interest will accrue on subsidized loans first originated between July 1, 2012, and July 1, 2014, and all unsubsidized loans during grace periods.

If loan interest accrues during this time and is not paid off, it will be added to the principal balance of your loan when repayment begins. Each loan has only one grace period.

PLUS loan borrowers who are parents of a dependent undergraduate student enter repayment once the loan is fully disbursed. PLUS loan borrowers who are graduate or professional degree students will have their loan placed into deferment while enrolled — and for an additional six months after dropping to less than half time, graduating, or withdrawing.

In all cases, your loan servicer will notify you when your first payment is due. If you don’t receive notification, contact the servicer to ensure it has your correct contact information.

When you first enter repayment, you will have the option to choose a repayment plan. If a choice is not made, you will be placed on the standard repayment plan.

Borrowers may be eligible for a deferment or forbearance that postpones payments and, in some cases, interest. To receive a deferment or forbearance, contact your loan servicer. If you aren’t sure who your student loan servicer is, go to the National Student Loan Data System.

You can prepay your loan at any time. That means you can make payments while in school or during the grace period and lower your total interest paid. Prepaying is a good way to help manage your total student loan debt.